13. LEASES

12 Months Ended

Sep. 30, 2020

Leases [Abstract]

LEASES

NOTE 13      LEASES

On October 1, 2019, the Company adopted the updated guidance on leases using the modified retrospective transition method. Results for Fiscal 2020 are presented under the updated guidance, while Fiscal 2019 is reported in accordance with historical lease accounting guidance.

The Company’s operating leases are primarily for corporate, sales and administrative office space. Total operating lease expense was $562,000 in Fiscal 2020 and total rent expense was $473,000 in Fiscal 2019. These expenses are recorded in general and administrative expenses on the consolidated statements of operations. 

The Company leases certain computer equipment through finance lease agreements expiring through July 2024. Amortization expense related to assets under finance leases was $42,000 for Fiscal 2020. Interest expense related to assets under finance leases was $3,000 for Fiscal 2020. The following is a summary of computer equipment held under capital leases:

	September 30,
	2020			2019
Cost	$	203,000		$	203,000
Accumulated depreciation		(180,000	)		(138,000	)
Net book value	$	23,000		$	65,000

At September 30, 2020, additional information related to operating and finance leases was as follows:

Weighted Average Remaining Lease Term:
	Operating Leases	10.9 years
	Finance Leases	0.9 years
Weighted Average Discount Rate:
	Operating Leases	5.7%
	Finance Leases	5.8%

Future minimum payments under non-cancellable operating and finance leases are as follows:

Fiscal Years Ended September 30,	Operating Leases			Finance Leases
2021	$	458,000		$	24,000
2022		430,000			10,000
2023		426,000			–
2024		433,000			–
2025		395,000			–
Thereafter		2,805,000			–
Total future minimum lease payments		4,947,000			34,000
Less imputed interest		(1,328,000	)		(3,000	)
Total	$	3,619,000		$	31,000